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U.K. Energy Shortage: A Cautionary Tale

UK Gas

Britain is suffering its worst winter in 50 years. Everyone is grumbling about their fuel bills and wondering what has happened to spring. Soccer and rugby matches and horse-racing fixtures have been canceled. The government has warned that if the weather persists like this for another couple of weeks, rationing may be necessary. While Prime Minister Cameron will be the world leader who suffers most from the extended cold, this could have happened in any number of countries, and the difference between the U.K. and others is merely one of degree.

Reuters reported late last week, “The country risks running out of stored gas by April 8 based on the fall in its reserves seen since the cold hit at the beginning of March, Reuters calculations show. Gas storage sites have been depleted by 90 percent, with the equivalent of less than two days’ consumption remaining, data from Gas Infrastructure Europe shows.”

This situation has worsened because the U.K.’s supply from Norway will decline effective April 1, when a maintenance program begins. As a result, the Brits have been scrambling to get more gas delivered by tanker. There has been some success here, a tanker from Qatar arrived Sunday, March 23, another is due in Monday and two others are not far away. These shipments will help, but it shows how dire the situation has become.

The fact is this comes as no surprise. Last autumn, the power regulator Ofgem issued a report on Britain’s power generating capacity. In the report, Ofgem predicted that the spare capacity in the U.K. could fall from 14 percent now to four percent in by 2015, meaning the U.K. would need more imported gas at a higher price.

Naturally, the current government blames the previous government. Tim Yeo of the Conservative Party and chairman of the House of Commons select committee on energy and climate change said on BBC Radio 4, “This was an entirely predictable crisis. Energy policy has been neglected for over a decade. I’m afraid under the last government there was a new energy minister about every six months and very little long-term planning at all.” Of course, the coalition has been in office for three years now, so some of the blame lies with the current government.

Mr. Yeo added, “It is very important and we should all understand that we’ve ended the era of cheap energy, and households and businesses are going to be paying more for their energy in the next ten years no matter what.”

That said, a lack of planning is clearly at the core of Britain’s problem. No one expected the winter to be the worst since before the Beatles were big, but the experts knew capacity was a problem. Now, the crunch has come. Britain’s case is a cautionary tale.



Jeff Myhre

Jeff Myhre is a graduate of the University of Colorado where he double majored in history and international affairs. He earned his PhD at the London School of Economics in international relations, and his dissertation was published by Westview Press under the title The Antarctic Treaty System: Politics, Law and Diplomacy. He is the founder of The Kensington Review, an online journal of commentary launched in 2002 which discusses politics, economics and social developments. He has written on European politics, international finance, and energy and resource issues in numerous publications and for such private entities as Lloyd's of London Press and Moody's Investors Service. He is a member of both the Foreign Policy Association and the World Policy Institute.